07-005648PL Department Of Financial Services vs. Odalys Calvo Status: Closed Recommended Order on Thursday, July 24, 2008.

Summary: Respondent is guilty of completing and submitting three insurance applications knowing that they contained false information and doing so with the intent to defraud the insurer. Recommend revocation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF FINANCIAL SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 07-5648PL

)

ODALYS CALVO, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to Sections 120.569 and 120.57(1), Florida Statutes, 1

before Stuart M. Lerner, a duly-designated Administrative Law

Judge of the Division of Administrative Hearings (DOAH), on

March 25, 2008, by video teleconference at sites in Miami and

Tallahassee, Florida.

APPEARANCES

For Petitioner: W. Gautier Kitchen, Esquire

Department of Financial Services

Division of Legal Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

For Respondent: Odalys Calvo, pro se

3064 Southwest 156th Place

Miami , Florida 33185

STATEMENT OF THE ISSUE

Whether Respondent committed the violations alleged in the

Administrative Complaint issued against her and, if so, what

penalty should be imposed.

PRELIMINARY STATEMENT

On November 7, 2007, the Department of Financial Services

(Department) issued an eleven-count Administrative Complaint

against Respondent, notifying her that, based on the allegations

of wrongdoing made therein, it "intend[ed] to enter an Order

suspending or revoking [her] licenses and appointments as an

insurance agent or impose such penalties as may be provided

under [the law]." In the first ten counts of the Administrative

Complaint, the Department alleged that Respondent willfully and

knowingly completed and submitted automobile insurance

applications for ten customers (Blanca Duron (Count I);

Brisaida Castillo (Count II); Ricardo Fernandez (Count III);

Pedro Cruz, Sr. (Count IV); Pedro Cruz, Jr. (Count V); Arturo

Fernandez (Count VI); Diamely Cosio (Count VII); Eulogio

Martinez (Count VIII); Mariana Ruiz (Count IX); and Flor Miller

(Count X)) that "contained false addresses of the applicants to

indicate they resided in a different territory in order to

obtain lower premium charges[s], thereby defrauding the insurer

of the premium[s] [to which] it was entitled." In so doing,

according to the allegations made by the Department in these ten

counts of the Administrative Complaint, Respondent violated

Section 626.611(4), (7), (9), and (13), Florida Statutes;

Section 626.621(2), (3), and (6), Florida Statutes; and Section

626.9541(1)(k)1, Florida Statutes. The eleventh and final count

of the Administrative Complaint alleged that, "[a]cting in the

capacity of president, owner, operator, sole officer, and

registered agent of O.D.C. Insurance Services, Inc. d/b/a

Allstate Insurance Agency[,] since on or before September 17,

2005, [Respondent] failed to have [her] insurance agency

licensed," in violation of Section 626.112(7)(a), Florida

Statutes; Section 626.611(13), Florida Statutes; and Section

626.621(2) and (3), Florida Statutes.

On or about November 26, 2007, Respondent, through counsel,

filed a written request for "a proceeding to contest this action

pursuant to Sections 120.569 and 120.57(1)," Florida Statutes.

On December 11, 2007, the matter was referred to DOAH. Among

the documents the Department transmitted to DOAH was a Motion to

Dismiss Administrative Complaint that it had received from

Respondent. This motion was denied by the previously assigned

administrative law judge on January 14, 2008.

On February 19, 2008, Respondent's counsel of record filed

a motion seeking permission to withdraw as her counsel. As

required by Florida Administrative Code Rule 28-106.105(3), a

copy of the motion was served on Respondent. By order issued

February 25, 2008 (a copy of which was mailed to Respondent),

the motion was granted.

As noted above, the final hearing in this case was held on

March 25, 2008. 2

At the outset of the hearing, counsel for the Department

announced that the Department was voluntarily dismissing Counts

VI, VII, IX, and X of the Administrative Complaint.

Eight witnesses testified at the hearing: Blanca Duron;

Brisaida Castillo; Ricardo Fernandez; Pedro Cruz, Sr.;

Pedro Cruz, Jr.; Eulogio Martinez; Dania Darbouze; and

Respondent. In addition to these eight witnesses' testimony, 47

exhibits (Petitioner's Exhibits 1 through 21, 29 through 32, and

47 through 69) were offered and received into evidence.

Upon the unopposed request of Respondent, the deadline for

the filing of proposed recommended orders was set at 30 days from

the date of the filing with DOAH of the hearing transcript.

The hearing Transcript (consisting of one volume) was filed

with DOAH on April 4, 2008.

The Department filed its Proposed Recommended Order on

April 18, 2008.

On April 28, 2008, Respondent filed a motion requesting an

extension of time to file her proposed recommended order. In

her motion, she asserted that she needed the additional time

"because [she had] been in the hospital since 4-7-08" and would

remain there indefinitely. On April 30, 2008, the undersigned

issued an order granting Respondent's motion and giving her

until May 28, 2008, to file her proposed recommended order.

On May 27, 2008, Respondent filed a motion seeking a

further extension of time (of eight months to a year) to file

her proposed recommended order. She asserted in her motion that

she needed this additional time "because of the condition in

[her] personal life." Attached to the motion was a letter,

dated May 14, 2008, from a physician on the staff at Baptist

Hospital of Miami. The letter indicated that Respondent had

given birth prematurely to twins at the hospital on April 19,

2008; that one of the twins, unfortunately, had passed away on

April 30, 2008; and that the surviving twin remained in the

hospital's neonatal intensive care unit in critical condition.

The letter went on to state that it was "very important for

[Respondent] to be present with [the surviving twin] at the

hospital," where he was expected to remain "until at least

August." On June 2, 2008, the undersigned issued an Order,

which provided as follows:

Upon consideration, Respondent is hereby

granted until Monday, July 14, 2008, to file

her proposed recommended order. This 47-day

extension of time should be sufficient to

enable Respondent to either prepare and file

her proposed recommended order herself or

have an attorney or qualified representative

do so on her behalf. To the extent that

Respondent is requesting an extension of

time greater than 47 days, the request is

denied.

On July 14, 2008, Respondent filed a pleading she herself

prepared. 3 In it, she addressed the merits of the charges

against her, claiming that she was "innocent" and that the

Department's witnesses had "lie[d] under oath."

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

Licensure

1. Respondent has held a Florida 2-20 general lines

(property and casualty) insurance agent license since July 24,

1998, and a Florida 2-15 life (including variable annuity and

health) insurance agent license since August 17, 2005.

Facts Common to Counts I through V and VIII

2. At all times material to Counts I through V and VIII of

the Administrative Complaint, Respondent was employed by O. J.

Insurance (O. J.), a Miami insurance agency she had previously

owned for approximately 15 years before having sold it in

January 2003.

3. Respondent went to work for O. J.'s new owners in or

around June 2003.

4. She remained an employee of the agency for

approximately two years.

5. During this two-year period, Respondent was the only

licensed insurance agent at the agency. The agency's two other

employees (one of whom was Respondent's sister, Sonia Pupo) held

Florida 4-40 customer representative licenses.

6. Respondent and the agency's two customer

representatives were all salaried employees. None of them

received a commission.

7. The agency itself, however, received commissions from

the insurance companies whose policies it sold.

8. Respondent's performance as an employee of the agency

was evaluated on an annual basis. Among the factors considered

in the evaluation process was Respondent's productivity (that

is, the number of insurance policies she sold).

9. After her first year as an employee of the agency,

Respondent received a salary increase based upon the annual

evaluation she had received.

Facts Relating to Count I

10. On or about December 30, 2003, Blanca Duron went to

O. J., where she purchased automobile insurance from United

Automobile Insurance Company (United) through Respondent.

11. Respondent filled out the insurance application for

Ms. Duron.

12. On the application, Respondent put down that

Ms. Duron's address was 5205 Southwest 140th Place, Miami,

Florida, knowing that this was not Ms. Duron's correct address.

13. Ms. Duron actually resided on Southwest 7th Street in

Miami.

14. At no time did she ever tell Respondent that she lived

at 5205 Southwest 140th Place, Miami, Florida.

15. 5205 Southwest 140th Place, Miami, Florida, was in a

"territory" having lower insurance rates than the "territory" in

which Ms. Duron actually lived.

16. Respondent's purpose in falsifying Ms. Duron's address

on the application was to enable Ms. Duron to pay a lower

premium than United would have charged had her correct address

been entered on the application.

Facts Relating to Count II

17. On or about December 6, 2004, Brisaida Castillo went

to O. J., where she purchased automobile insurance from United

through Respondent.

18. Respondent filled out the insurance application for

Ms. Castillo.

19. Respondent put down on the application that

Ms. Castillo's address was 5205 Southwest 140th Place, Miami,

Florida, knowing that this was not Ms. Castillo's correct

address.

20. Ms. Castillo actually resided on Northwest 22nd Court

in Miami.

21. At no time did she ever tell Respondent that she lived

at 5205 Southwest 140th Place, Miami, Florida.

22. 5205 Southwest 140th Place, Miami, Florida, was in a

"territory" having lower insurance rates than the "territory" in

which Ms. Castillo actually lived.

23. Respondent's purpose in falsifying Ms. Castillo's

address on the application was to enable Ms. Castillo to pay a

lower premium than United would have charged had her correct

address been entered on the application.

Facts Relating to Count III

24. On or about December 10, 2004, Ricardo Fernandez went

to O. J., where he purchased automobile insurance from United

through Respondent.

25. Respondent filled out the insurance application for

Mr. Fernandez.

26. Respondent put down on the application that

Mr. Fernandez's address was 5205 Southwest 140th Place, Miami,

Florida, knowing that this was not Mr. Fernandez's correct

address.

27. Mr. Fernandez actually resided on Essex Avenue in

Hialeah, Florida.

28. At no time did he ever tell Respondent that he lived

at 5205 Southwest 140th Place, Miami, Florida.

29. 5205 Southwest 140th Place, Miami, Florida, was in a

"territory" having lower insurance rates than the "territory" in

which Mr. Fernandez actually lived.

30. Respondent's purpose in falsifying Mr. Fernandez's

address on the application was to enable Mr. Fernandez to pay a

lower premium than United would have charged had his correct

address been entered on the application.

Facts Relating to Count IV

31. On or about February 1, 2005, Pedro Cruz, Sr., went to

O. J., where he purchased automobile insurance from United.

32. It is unclear from the record whether it was

Respondent or her sister, Ms. Pupo, who filled out Mr. Cruz,

Sr.'s insurance application. 4

33. The application indicated that Mr. Cruz, Sr.'s address

was 5205 Southwest 140th Place, Miami, Florida.

34. This was not his correct address.

35. He actually resided on Northwest 18th Street in Miami.

36. At no time did he ever tell Respondent that he lived

at 5205 Southwest 140th Place, Miami, Florida.

37. 5205 Southwest 140th Place, Miami, Florida, was in a

"territory" having lower insurance rates than the "territory" in

which Mr. Cruz, Sr., actually lived.

38. Consequently, Mr. Cruz, Sr., paid a lower premium than

United would have charged had his correct address been entered

on the application.

Facts Relating to Count V

39. On or about December 6, 2004, Pedro Cruz, Jr., went to

O. J., where he purchased automobile insurance from United

through Respondent.

40. Respondent filled out the insurance application for

Mr. Cruz, Jr.

41. Respondent put down on the application that Mr. Cruz,

Jr.'s address was 5521 Southwest 163rd Court, Miami, Florida. 5

42. Mr. Cruz, Jr., actually resided on Northwest 18th

Street in Miami.

43. At no time did he ever tell Respondent that he lived

at 5521 Southwest 163rd Court, Miami, Florida. 6

Facts Relating to Count VIII

44. On or about February 3, 2005, Eulogio Martinez went to

O. J., where he purchased automobile insurance from United

through Respondent.

45. Respondent filled out the insurance application for

Mr. Martinez.

46. Respondent put down on the application that

Mr. Martinez's address was 5205 Southwest 142nd Place, Miami,

Florida.

47. Mr. Martinez actually resided on Northwest 5th Street

in Miami.

48. At no time did he ever tell Respondent that he lived

at 5205 Southwest 142nd Place, Miami, Florida. 7

Facts Relating to Count XI

49. Since September 2005, O.D.C. Insurance Services, Inc.

(O.D.C.) has operated an insurance agency (selling Allstate

insurance products) at 13860 Southwest 56th Street in Miami,

Florida, for which it has not obtained a license.

50. During this period of time, Respondent has been owner,

sole officer (president), and registered agent of O.D.C. and

responsible for the day-to-day operations of O.D.C.'s Allstate

insurance agency.

51. At all times material to Count XI of the

Administrative Complaint, Respondent was unaware of the

requirement that insurance agencies, such as O.D.C.'s, be

licensed.

CONCLUSIONS OF LAW

52. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

53. "Chapters 624-632, 634, 635, 636, 641, 642, 648, and

651 constitute the 'Florida Insurance Code.'" § 624.01, Fla.

Stat.

54. It is the Department's responsibility to "enforce the

provisions of this code." § 624.307(1), Fla. Stat.

55. Among the Department's duties is to license and

discipline insurance agents.

56. The Department is authorized to suspend or revoke

agents' licenses, pursuant to Sections 626.611 and 626.621,

Florida Statutes; to impose fines on agents of up to $500.00 or,

in cases where there are "willful violation[s] or willful

misconduct," up to $3,500, and to "augment[]" such disciplinary

action "by an amount equal to any commissions received by or

accruing to the credit of the [agent] in connection with any

transaction as to which the grounds for suspension, [or]

revocation . . . related," pursuant to Section 626.681, Florida

Statutes; to place agents on probation for up to two years,

pursuant to Section 626.691, Florida Statutes 8 ; and to order

agents "to pay restitution to any person who has been deprived

of money by [their] misappropriation, conversion, or unlawful

withholding of moneys belonging to insurers, insureds,

beneficiaries, or others," pursuant to Section 626.692, Florida

Statutes.

57. The Department may take such disciplinary action

against an agent only after the agent has been given reasonable

written notice of the charges and an adequate opportunity to

request a proceeding pursuant to Sections 120.569 and 120.57,

Florida Statutes. See § 120.60(5), Fla. Stat.

58. An evidentiary hearing must be held, if requested by

the agent, when there are disputed issues of material fact.

§§ 120.569 and 120.57(1), Fla. Stat.

59. At the hearing, the Department bears the burden of

proving that the agent engaged in the conduct, and thereby

committed the violations, alleged in the charging instrument.

Proof greater than a mere preponderance of the evidence must be

presented for the Department to meet its burden of proof. Clear

and convincing evidence of the agent's guilt is required. See

Department of Banking and Finance, Division of Securities and

Investor Protection v. Osborne Stern and Company , 670 So. 2d 932,

935 (Fla. 1996); Beshore v. Department of Financial Services ,

928 So. 2d 411, 413 (Fla. 1st DCA 2006); Pou v. Department of

Insurance and Treasurer , 707 So. 2d 941 (Fla. 3d DCA 1998); and §

120.57(1)(j), Fla. Stat. ("Findings of fact shall be based upon a

preponderance of the evidence, except in penal or licensure

disciplinary proceedings or except as otherwise provided by

statute . . . .").

60. Clear and convincing evidence is an "intermediate

standard," "requir[ing] more proof than a 'preponderance of the

evidence' but less than 'beyond and to the exclusion of a

reasonable doubt.'" In re Graziano , 696 So. 2d 744, 753 (Fla.

1997). For proof to be considered "'clear and convincing' . . .

the evidence must be found to be credible; the facts to which

the witnesses testify must be distinctly remembered; the

testimony must be precise and explicit and the witnesses must be

lacking in confusion as to the facts in issue. The evidence

must be of such weight that it produces in the mind of the trier

of fact a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994), quoting, with approval,

from Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA

1983); see also In re Adoption of Baby E. A. W. , 658 So. 2d 961,

967 (Fla. 1995)("The evidence [in order to be clear and

convincing] must be sufficient to convince the trier of fact

without hesitancy."). "Although this standard of proof may be

met where the evidence is in conflict, . . . it seems to

preclude evidence that is ambiguous." Westinghouse Electric

Corporation, Inc. v. Shuler Bros., Inc. , 590 So. 2d 986, 988

(Fla. 1st DCA 1991).

61. In determining whether the Department has met its

burden of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegations of wrongdoing

made in the charging instrument. Due process prohibits the

Department from taking disciplinary action against an agent

based on matters not specifically alleged in the charging

instrument, unless those matters have been tried by consent.

See Trevisani v. Department of Health , 908 So. 2d 1108, 1109

(Fla. 1st DCA 2005); Aldrete v. Department of Health, Board of

Medicine , 879 So. 2d 1244, 1246 (Fla. 1st DCA 2004); Shore

Village Property Owners' Association, Inc. v. Department of

Environmental Protection , 824 So. 2d 208, 210 (Fla. 4th DCA

2002); Cottrill v. Department of Insurance , 685 So. 2d 1371,

1372 (Fla. 1st DCA 1996); and Delk v. Department of Professional

Regulation , 595 So. 2d 966, 967 (Fla. 5th DCA 1992).

62. The Administrative Complaint in the instant case

contains seven remaining counts: six counts (Counts I, II, III,

IV, V, and VIII) charging Respondent with violating Section

626.611(4), (7), (9), and (13), Florida Statutes; Section

626.621(3) and (6), Florida Statutes; and Section

626.9541(1)(k)1, Florida Statutes, by willfully and knowingly

completing and submitting automobile insurance applications that

"contained false addresses of the applicants to indicate they

resided in a different territory in order to obtain lower

premium charges[s], thereby defrauding the insurer of the

premium[s] [to which] it was entitled"; and one count (Count XI)

charging Respondent with having "failed to have [her] insurance

agency licensed," in violation of Section 626.112(7)(a), Florida

Statutes; Section 626.611(13), Florida Statutes; and Section

626.621(2) and (3), Florida Statutes.

63. At all times material to the instant case, Section

626.611(4), (7), (9) and (13), Florida Statutes, has provided,

in pertinent part, as follows:

The department shall . . . suspend [or]

revoke . . . the license . . . of

any . . . agent . . . , and it shall suspend

or revoke the eligibility to hold a

license . . . of any such person, if it

finds that as to the . . . licensee . . .

any one or more of the following applicable

grounds exist:

* * *

(4) If the license . . . is willfully used,

or to be used, to circumvent any of the

requirements or prohibitions of this code.

* * *

(7) Demonstrated lack of fitness or

trustworthiness to engage in the business of

insurance.

* * *

(9) Fraudulent or dishonest practices in

the conduct of business under the

license . . . .

* * *

(13) Willful failure to comply with, or

willful violation of, any proper order or

rule of the department or willful violation

of any provision of this code.

64. At all times material to the instant case, Section

626.621(2), (3) and (6), Florida Statutes, has provided, in

pertinent part, as follows:

The department may, in its discretion, . . .

suspend [or] revoke, . . . the license . . .

of any . . . agent . . . , and it may

suspend or revoke the eligibility to hold a

license . . . of any such person, if it

finds that as to the . . . licensee . . .

any one or more of the following applicable

grounds exist under circumstances for which

such . . . suspension [or] revocation . . .

is not mandatory under s. 626.611:

* * *

(2) Violation of any provision of this code

or of any other law applicable to the

business of insurance in the course of

dealing under the license or appointment.

* * *

(3) Violation of any lawful order or rule

of the department, commission, or office.

* * *

(6) In the conduct of business under the

license or appointment, engaging in unfair

methods of competition or in unfair or

deceptive acts or practices, as prohibited

under part IX of this chapter, or having

otherwise shown himself or herself to be a

source of injury or loss to the public.

65. Among the "unfair methods of competition" and "unfair

or deceptive acts or practices, as prohibited under part IX of

[Chapter 626, Florida Statutes]" (referenced in Section

626.621(6), Florida Statutes) are those described in Section

626.9541(1)(k)1., Florida Statutes, which provides as follows:

UNFAIR METHODS OF COMPETITION AND UNFAIR OR

DECEPTIVE ACTS. --The following are defined

as unfair methods of competition and unfair

or deceptive acts or practices:

Misrepresentation in insurance applications.

Knowingly making a false or fraudulent

written or oral statement or representation

on, or relative to, an application or

negotiation for an insurance policy for the

purpose of obtaining a fee, commission,

money, or other benefit from any insurer,

agent, broker, or individual.

66. Section 626.112(7)(a), Florida Statutes, provides as

follows:

Effective October 1, 2006, no individual,

firm, partnership, corporation, association,

or any other entity shall act in its own

name or under a trade name, directly or

indirectly, as an insurance agency, unless

it complies with s. 626.172 with respect to

possessing an insurance agency license for

each place of business at which it engages

in any activity which may be performed only

by a licensed insurance agent. Each agency

engaged in business in this state before

January 1, 2003, which is wholly owned by

insurance agents currently licensed and

appointed under this chapter, each

incorporated agency whose voting shares are

traded on a securities exchange, each agency

designated and subject to supervision and

inspection as a branch office under the

rules of the National Association of

Securities Dealers, and each agency whose

primary function is offering insurance as a

service or member benefit to members of a

nonprofit corporation may file an

application for registration in lieu of

licensure in accordance with s. 626.172(3).

Each agency engaged in business before

October 1, 2006, shall file an application

for licensure or registration on or before

October 1, 2006.

1. If an agency is required to be licensed

but fails to file an application for

licensure in accordance with this section,

the department shall impose on the agency an

administrative penalty in an amount of up to

$10,000.

2. If an agency is eligible for

registration but fails to file an

application for registration or an

application for licensure in accordance with

this section, the department shall impose on

the agency an administrative penalty in an

amount of up to $5,000.

67. Because they are penal in nature, the foregoing

statutory provisions must be strictly construed, with any

reasonable doubts as to their meaning being resolved in favor of

the licensee. See Beckett v. Department of Financial Services ,

982 So. 2d 94, 100 (Fla. 1st DCA 2008)("[A]gencies are not

permitted to extend the requirements of [penal] statutes by

construction."); and Capital National Financial Corporation v.

Department of Insurance , 690 So. 2d 1335, 1337 (Fla. 3rd DCA

1997)("Section 627.8405 is a penal statute and therefore must be

strictly construed . . . . 'When a statute imposes a penalty,

any doubt as to its meaning must be resolved in favor of a

strict construction so that those covered by the statute have

clear notice of what conduct the statute proscribes.'").

68. An examination of the evidentiary record in this case

reveals that the Department clearly and convincingly proved that

Respondent violated Section 626.611(4), (7), (9), and (13),

Florida Statutes; Section 626.621(2), (3), and(6), Florida

Statutes; and Section 626.9541(1)(k)1, Florida Statutes, as

alleged in Counts I through III of the Administrative Complaint,

by willfully and knowingly completing and submitting automobile

insurance applications for Ms. Duron (Count I), Ms. Castillo

(Count II), and Mr. Fernandez (Count III) that "contained false

addresses of the applicants to indicate they resided in a

different territory in order to obtain lower premium charges[s],

thereby defrauding the insurer of the premium[s] [to which] it

was entitled."

69. The Department failed to prove by clear and convincing

evidence that Respondent was the insurance agency employee who

completed and submitted Mr. Cruz, Sr.'s automobile insurance

application, as alleged in Count IV of the Administrative

Complaint. Accordingly, Count IV of the Administrative

Complaint (which is predicated upon the factual allegation that

Respondent had engaged in such conduct) must be dismissed. 9

70. While record evidence establishes that Respondent

completed and submitted automobile insurance applications for

Mr. Cruz, Jr., and Mr. Martinez that "contained false

addresses," there is not clear and convincing proof that she did

so willfully and knowingly with the intent to defraud United, as

alleged in Counts V and VIII of the Administrative Complaint.

Accordingly, these counts of the Administrative Complaint must

too be dismissed.

71. The Department also failed to establish Respondent's

guilt of the violations alleged in Count XI of the

Administrative Complaint. Although the Department's proof

clearly and convincingly established that O.D.C.'s Allstate

insurance agency has failed to obtain an insurance agency

license in violation of Section 626.112(7)(a), Florida Statutes,

it is the "agency" (that is, O.D.C., the corporate entity), not

Respondent, that is liable for this violation under the statute.

That Respondent has been, at all material times, the owner, sole

officer (president), and registered agent of O.D.C. and

responsible for its day-to-day operations is, standing alone, an

insufficient basis upon which to impose liability upon

Respondent. See Gasparini v. Pordomingo , 972 So. 2d 1053, 1055

(Fla. 3d DCA 2008)("A general principle of corporate law is that

a corporation is a separate legal entity, distinct from the

persons comprising them. To 'pierce the corporate veil' three

factors must be proven: (1) the shareholder dominated and

controlled the corporation to such an extent that the

corporation's independent existence, was in fact non-existent

and the shareholders were in fact alter egos of the corporation;

(2) the corporate form must have been used fraudulently or for

an improper purpose; and (3) the fraudulent or improper use of

the corporate form caused injury to the claimant. In this case,

none of these factors were alleged or proven. Moreover, the

mere fact that Gasparini is a stockholder and officer of

International Trading does not, without more, create personal

liability. The law is clear that the mere ownership of a

corporation by a few shareholders, or even one shareholder, is

an insufficient reason to pierce the corporate veil. '[E]ven if

a corporation is merely an alter ego of its dominant shareholder

or shareholders, the corporate veil cannot be pierced so long as

the corporation's separate identity was lawfully

maintained.'")(citations omitted). Accordingly, Count XI of the

Administrative Complaint must be dismissed.

72. To determine the penalty the Department should impose

on Respondent for committing the violations alleged in Counts I

through III of the Administrative Complaint , it is necessary to

consult the Department's "penalty guidelines" set forth in

Florida Administrative Code Rule Chapter 69B-231, which impose

restrictions and limitations on the exercise of the Department's

disciplinary authority. See Parrot Heads, Inc. v. Department of

Business and Professional Regulation , 741 So. 2d 1231, 1233

(Fla. 5th DCA 1999)("An administrative agency is bound by its

own rules . . . creat[ing] guidelines for disciplinary

penalties."); cf . State v. Jenkins , 469 So. 2d 733, 734 (Fla.

1985)("[A]gency rules and regulations, duly promulgated under

the authority of law, have the effect of law."); Buffa v.

Singletary , 652 So. 2d 885, 886 (Fla. 1st DCA 1995)("An agency

must comply with its own rules."); Decarion v. Martinez , 537 So.

2d 1083, 1084 (Fla. 1st 1989)("Until amended or abrogated, an

agency must honor its rules."); and Williams v. Department of

Transportation , 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency

is required to comply with its disciplinary guidelines in taking

disciplinary action against its employees).

73. Florida Administrative Code Rule 69B-231.040 explains

how the Department goes about "[c]alculating [a] penalty." It

provides as follows:

(1) Penalty Per Count.

(a) The Department is authorized to find

that multiple grounds exist under Sections

626.611 and 626.621, F.S., for disciplinary

action against the licensee based upon a

single count in an administrative complaint

based upon a single act of misconduct by a

licensee. However, for the purpose of this

rule chapter, only the violation specifying

the highest stated penalty will be

considered for that count. The highest

stated penalty thus established for each

count is referred to as the "penalty per

count".

(b) The requirement for a single highest

stated penalty for each count in an

administrative complaint shall be applicable

regardless of the number or nature of the

violations established in a single count of

an administrative complaint.

(2) Total Penalty. Each penalty per count

shall be added together and the sum shall be

referred to as the "total penalty".

(3) Final Penalty.

(a) The final penalty which will be imposed

against a licensee under these rules shall

be the total penalty, as adjusted to take

into consideration any aggravating or

mitigating factors;

(b) The Department may convert the total

penalty to an administrative fine and

probation if the licensee has not previously

been subjected to an administrative penalty

and the current action does not involve a

violation of Section 626.611, F.S.;

(c) The Department will consider the

factors set forth in rule subsection 69B-

231.160(1), F.A.C., in determining whether

to convert the total penalty to an

administrative fine and probation.

(d) In the event that the final penalty

would exceed a suspension of twenty-four

(24) months, the final penalty shall be

revocation.

74. Florida Administrative Code Rule 69B-231.080 is

entitled, "Penalties for Violation of Section 626.611." It

provides, in pertinent part, as follows:

If it is found that the licensee has

violated any of the following subsections of

Section 626.611, F.S., for which compulsory

suspension or revocation . . . is required,

the following stated penalty shall apply:

* * *

(4) Section 626.611(4), F.S. - suspension 6

months

* * *

(7) Section 626.611(7), F.S. - suspension 6

months

* * *

(9) Section 626.611(9), F.S. - suspension 9

months

* * *

(13) Section 626.611(13), F.S. - suspension

6 months

75. Florida Administrative Code Rule 69B-231.090 is

entitled, "Penalties for Violation of Section 626.621." It

provides, in pertinent part, as follows:

If it is found that the licensee has

violated any of the following subsections of

Section 626.621, F.S., for which suspension

or revocation of license(s) and

appointment(s) is discretionary, the

following stated penalty shall apply:

* * *

(2) Section 626.621(2), F.S. - suspension 3

months

(3) Section 626.621(3), F.S. - suspension 3

months

* * *

(6) Section 626.621(6), F.S. - see Rule

69B-231.100, F.A.C.

76. Florida Administrative Code Rule 69B-231.100 is

entitled, "Penalties for Violation of Subsection 626.621(6)."

It provides, in pertinent part, as follows:

If a licensee is found to have violated

subsection 626.621(6), F.S., by engaging in

unfair methods of competition or in unfair

or deceptive acts or practices as defined in

any of the following paragraphs of

subsection 626.9541(1), F.S., the following

stated penalty shall apply:

* * *

(11) Section 626.9541(1)(k), F.S. -

suspension 9 months

77. In the instant case, the "penalty per count" for each

of Counts I through III of the Administrative Complaint is a

nine-month suspension, making the "total penalty" a 27-month

suspension.

78. The "aggravating/mitigating factors" that must be

considered to determine whether any "adjust[ment]" should be

made to this "total penalty" are set forth in Florida

Administrative Code Rule 69B-231.160, which provides, in

pertinent part, as follows:

The Department shall consider the following

aggravating and mitigating factors and apply

them to the total penalty in reaching the

final penalty assessed against a licensee

under this rule chapter. After

consideration and application of these

factors, the Department shall, if warranted

by the Department's consideration of the

factors, either decrease or increase the

penalty to any penalty authorized by law.

(1) For penalties other than those assessed

under Rule 69B-231.150, F.A.C.:

(a) Willfulness of licensee's conduct;

(b) Degree of actual injury to victim;

(c) Degree of potential injury to victim;

(d) Age or capacity of victim;

(e) Timely restitution;

(f) Motivation of licensee;

(g) Financial gain or loss to licensee;

(h) Cooperation with the Department;

(i) Vicarious or personal responsibility;

(j) Related criminal charge; disposition;

(k) Existence of secondary violations in

counts;

(l) Previous disciplinary orders or prior

warning by the Department; and

(m) Other relevant factors.

79. Examining the evidentiary record in the instant case

in light of these "aggravating/mitigating factors" results in

the conclusion that a decrease of the "total penalty" (which is

a suspension in excess of 24 months) is not warranted.

80. Accordingly, the "final penalty" in the instant case,

pursuant to Florida Administrative Code Rule 69B-231.040(3)(d),

is the revocation of Respondent's licenses.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Department issue a Final Order finding

Respondent guilty of the violations alleged in Counts I through

III of the Administrative Complaint, revoking her licenses for

having committed these violations, and dismissing the remaining

counts of the Administrative Complaint.

DONE AND ENTERED this 24th day of July, 2008, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 24th day of July, 2008.

ENDNOTES

1 / Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2007).

2 / The hearing was originally scheduled for February 14, 2008,

but was continued at Respondent's request.

3 / Respondent explained in the pleading that she had not been

able to retain an attorney due to lack of funds.

4 / At the final hearing, Mr. Cruz, Sr., gave internally

conflicting testimony on the matter.

5 / In its Proposed Recommended Order, the Department asks the

undersigned to make a finding of fact that "Sonia Pupo resides

at 5521 Southwest 163rd Court in Miami, Florida." The only

record evidence concerning Ms. Pupo's residence --a printout of

the result of a November 16, 2006 www.whitepages.com search

showing that she resided at that address-- constitutes hearsay

evidence. Inasmuch as it has not been shown that this evidence

would have been admissible over objection in a civil proceeding

in Florida (under Section 90.803(17), Florida Statutes, or any

other exception to the rule excluding hearsay evidence), it is

insufficient to support a finding of fact in this administrative

proceeding. See § 120.57(1)(c)("Hearsay evidence may be used

for the purpose of supplementing or explaining other evidence,

but it shall not be sufficient in itself to support a finding

unless it would be admissible over objection in civil

actions."). Moreover, this evidence only addresses Ms. Pupo's

residency as of the date of the www.whitepages.com search--

November 16, 2006.

6 / The evidentiary record does not support a finding that 5521

Southwest 163rd Court, Miami, Florida, was in a "territory"

having lower insurance rates than the "territory" in which

Mr. Cruz, Jr., actually lived.

7 / The evidentiary record does not support a finding that 5205

Southwest 14 2 nd Place, Miami, Florida, was in a "territory"

having lower insurance rates than the "territory" in which

Mr. Martinez actually lived.

8 / The Department may impose a fine or place an agent on

probation "in lieu of" suspension or revocation of the agent's

license " except on a second offense or when . . . suspension

[or] revocation . . . is mandatory." §§ 626.681 and 626.691,

Fla. Stat.

9 / The Department suggests in its Proposed Recommended Order

that Respondent can be held responsible for any wrongdoing

engaged in by her sister and the agency's other customer

representative in completing and processing insurance

applications, apparently relying on Section 626.7354(5), Florida

Statutes, which provides that "[a]ll business transacted by a

customer representative under his or her license shall be in the

name of the agent or agency by which he or she is appointed, and

the agent or agency shall be responsible and accountable for all

acts of the customer representative within the scope of such

appointment." Such a theory, however, cannot support a finding

of guilt in the instant case inasmuch as it was not advanced in

the Administrative Complaint. See Department of Insurance and

Treasurer v. Gottlieb , No. 92-1902, 1993 Fla. Div. Adm. Hear.

LEXIS 5893 *6 (Fla. DOAH 1993)(Recommended Order)("Agencies

cannot take disciplinary action against a licensee on the basis

of facts not alleged in the Administrative Complaint on or the

basis of legal theories not asserted in the Administrative

Complaint.").

COPIES FURNISHED :

W. Gautier Kitchen, Esquire

Department of Financial Services

Division of Legal Services

612 Larson Building

200 East Gaines Street

Tallahassee, Florida 32399-0333

Odalys Calvo,

3064 Southwest 156th Place

Miami , Florida 33185

Honorable Alex Sink

Chief Financial Officer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0300

Daniel Sumner, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399-0307

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.